FOX19 Investigates: Government late fees add-up in tough economy

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A FOX19 investigation reveals state government agencies in Ohio have been wasting your tax money by not paying bills on time, racking-up hundreds of thousands of dollars in late fees in recent years, according to government documents turned over to FOX19.

An Office of Budget and Management breakdown of the late fees state agencies paid show 2009 was particularly bad. They added-up to $511,364 at a time when we were in the midst of the Great Recession.

OBM spokesman Tom Betti says state workers who pay their agency's bills were getting used to a new computer system back then.

He offered to let us talk to the person who trains state workers on how to use the government software.

FOX19 asked Robert Cooperman, the training academy director at OBM, if state workers actually care about paying bills on time.

"Absolutely," he said. "Absolutely. There seems to be a very conscientious effort to understand the material, to make sure they get it right."

But just up Broad Street in Columbus at the Buckeye Institute, there is skepticism.

"Government is not good at running businesses," said Kevin Holtsberry, the conservative think tank's president. "They just, they don't have a history of that. They don't hire the kind of people to do that."

He believes small businesses in Ohio could do the job better.

Take the Department of Mental Health. Year after year, it shows-up in reports of state agencies paying its bills late. A department spokeswoman declined our request for an on-camera interview. But in e-mails to FOX19, she explained that her agency purchases food and medicine for other state agencies, such as prisons, state psychiatric hospitals, and youth services.

The agency's records show many of Mental Health's late fees were the result of a "sister state agency" not getting the money to them by the time the invoices were due.

That wouldn't be allowed to happen in the private sector, Holtsberry argues.

"You'll go out of business," he said. "You'll lose clients. You won't have sales growth. The problem with government is, there's not that immediate push-back, right? If you don't pay your bills, taxpayers pay more. You don't go out of business. You don't lose your sales. You're still government."

To their credit, state agencies are doing better.

Compared with the half million dollars in late fees in 2009, the state paid $68,615 in the last fiscal year.

Could a small business do an even better job? We asked OBM's Robert Cooperman.

"No," he said. "I think there's a state culture and a state way of doing things that people are used to. And I mean, I've worked in the private sector and I think this – for what it is – works very well within the state, the confines of the state."

"The taxpayer's being taken care of?" we asked.

"I feel that way," said Cooperman. "I'm a taxpayer, too…"

Meanwhile, one state agency still has not turned-over its documents detailing why it paid late fees. In the last few years, the Ohio Industrial Commission has accumulated nearly $30,000 in interest charges. Despite the fact FOX19 requested the documents last month, an agency spokesman says the Industrial Commission is still removing personal information from the documents, as required by state law.

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